DN
Answered
Services incorporate the four I's of product marketing. How would each of these four elements apply to a stock brokerage service?
On Jun 19, 2024
The four unique elements of services are: (1) intangibility-a brokerage service is intangible because it cannot be seen, held, or touched before the purchase decision; (2) inconsistency-the quality of a brokerage service will vary because different people, who vary in their job performance, provide this service; (3) inseparability-consumers cannot separate the service (stock purchase) from the deliverer of the service (stockbroker) or the setting in which the service occurs; and (4) inventory-brokerage services have little inventory carrying costs because the brokers work on commission. If a broker does not make any sales, commission costs will be lower.
DN
Answered
Describe the return on assets ratio and the DuPont approach for calculating return on assets.
On May 18, 2024
The return on assets ratio is calculated by dividing net income by average total assets.The ratio measures the amount of income earned for every dollar invested in assets and is a measure of profitability and management effectiveness with respect to asset management.The DuPont formula states that the return on assets ratio has two component ratios,net profit margin and total asset turnover.The net profit margin ratio measures the net income generated per sales dollar and the total asset turnover ratio measures the net sales generated for average total assets.Return on assets equals net profit margin multiplied by total asset turnover.The DuPont formula implies that return on assets can be improved through both earnings and efficiency of asset use.